E5.11 (LO 3,4), AP Service Spencer Kars provides shuttle service between four hotels near a medi- cal center and an international airport. Spencer Kars uses two 10-passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below. $36,000 Sales (1,500 passengers) Variable costs Fuel Tolls and parking Maintenance Contribution margin Fixed costs Salaries Depreciation Insurance Net income $ 5,040 3,100 860 15,700 1,300 1,000 9,000 27,000 18,000 $9,000 Instructions a. Calculate the break-even point in (1) dollars and (2) number of passengers. b. Without calculations, determine the contribution margin at the break-even point.
E5.11 (LO 3,4), AP Service Spencer Kars provides shuttle service between four hotels near a medi- cal center and an international airport. Spencer Kars uses two 10-passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below. $36,000 Sales (1,500 passengers) Variable costs Fuel Tolls and parking Maintenance Contribution margin Fixed costs Salaries Depreciation Insurance Net income $ 5,040 3,100 860 15,700 1,300 1,000 9,000 27,000 18,000 $9,000 Instructions a. Calculate the break-even point in (1) dollars and (2) number of passengers. b. Without calculations, determine the contribution margin at the break-even point.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
Transcribed Image Text:E5.11 (LO 3,4), AP Service Spencer Kars provides shuttle service between four hotels near a medi
cal center and an international airport. Spencer Kars uses two 10-passenger vans to offer 12 round trips
per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below.
$36,000
Sales (1,500 passengers)
Variable costs
Fuel
Tolls and parking
Maintenance
Contribution margin
Fixed costs
Salaries
Depreciation
Insurance
Net income
$ 5,040
3,100
860
15,700
1,300
1,000
9,000
27,000
18,000
$ 9,000
Instructions
a. Calculate the break-even point in (1) dollars and (2) number of passengers.
b. Without calculations, determine the contribution margin at the break-even point.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education